French Private Pension Simulator

The PER (Plan d'Epargne Retraite) was created by the PACTE law in 2019 to simplify France's fragmented private pension landscape. It replaced three older products (PERP, Madelin, and PERCO) with a single, modern vehicle. If you are familiar with the US 401(k) or IRA, or the UK SIPP, the PER shares the same core principle: contribute now, get a tax break, withdraw at retirement.

• Upfront tax deduction: Contributions are deductible from taxable income (cap: 10% of income, max 37 680 € in 2026). The higher your marginal tax bracket, the bigger the benefit -- similar to pre-tax 401(k) contributions in the US.
• Lock-up: Funds are locked until retirement, with exceptions for: buying your primary home, death of spouse, disability, over-indebtedness, or exhaustion of unemployment benefits. This is stricter than a US 401(k) (which allows penalty-based withdrawals) but more flexible than the old French products.
• Withdrawal options: Lump sum (100%), annuity, or mixed. The lump sum is subject to income tax (on contributions) + 30% flat tax (on gains). The annuity is taxed as income with a 10% deduction. Unlike a US Roth IRA, there is no fully tax-free withdrawal option.

French life insurance (assurance vie) is nothing like what the term suggests in English. It is not primarily a death benefit product. Instead, it is France's most popular savings and investment wrapper, holding over 1,900 billion euros in assets. Think of it as a tax-advantaged brokerage account with estate planning benefits -- somewhat like a Roth IRA and a trust combined, but with its own unique French characteristics.

• No contribution cap (but optimal tax benefits apply to premiums paid before age 70 and below 150 000 €). Unlike a US IRA with its strict annual limits, you can invest millions into a life insurance contract.
• Full liquidity: You can withdraw at any time, unlike the PER. This is a major advantage over locked retirement accounts.
• Favourable taxation after 8 years: Annual allowance of 4 600 € (single) or 9 200 € (couple) on gains when withdrawing. Beyond that: 7.5% tax + 17.2% social charges. Before 8 years, a 30% flat tax applies. The 8-year rule is unique to France.
• Estate planning: Up to 152 500 € per beneficiary passes outside the estate, free of inheritance tax (for premiums paid before age 70). This makes it one of the most powerful estate planning tools in Europe.
• Investment options: Euro funds (capital-guaranteed, ~2-3%/yr) and unit-linked funds (equities, bonds, real estate... higher returns but risk of loss). The euro fund concept has no real US equivalent -- it is unique to French and European insurance.

Optimal strategy: Combine both. Use the PER for the upfront tax deduction if your marginal tax bracket is 30% or above (similar to maxing out pre-tax 401(k) contributions), and use life insurance for flexibility, liquidity, and estate planning (similar to a Roth IRA for its tax-free growth, but with added estate benefits). A common French adviser tip: reinvest your PER tax savings into your life insurance contract.

Both the PER and life insurance offer a choice of investment profiles. The concept is identical to target-date funds or risk-based portfolios in the US/UK, but the underlying products differ. French investors have access to "euro funds" (guaranteed-capital) which have no direct US equivalent.

Life-cycle management: Many PER providers offer "gestion pilotee a horizon" -- an automated glide path that shifts from aggressive to conservative as retirement approaches. For example, 85% equities at age 30 gradually moves to 70% euro funds by age 60. This is essentially the same concept as US target-date funds (e.g. Vanguard Target Retirement 2055), but implemented through the French insurance framework.

On the way in:

• Contributions are deductible from taxable income (default option) -- exactly like pre-tax 401(k) or Traditional IRA contributions in the US
• 2026 cap: 10% of net income, minimum 4 710 €, maximum 37 680 €
• Unused allowances from the past 3 years can be carried forward (similar to UK pension carry-forward rules)
• Married couples can pool their allowances for greater flexibility

On the way out:

• Lump sum: Contributions taxed at income tax rates, gains taxed at the 30% flat tax (12.8% income + 17.2% social). Comparable to Traditional IRA withdrawal taxation in the US.
• Annuity: Taxed as income with a 10% standard deduction, plus social charges on a fraction. Similar to how pension income is taxed in most countries.
• Non-deduction option: If you choose not to deduct at entry, the lump sum withdrawal is tax-free on contributions (only gains are taxed). This works similarly to a US Roth IRA or non-deductible Traditional IRA.

• Start early: Thanks to compound interest, 100 €/month at 5% for 30 years grows to 83 226 €, versus only 34 813 € over 15 years. The same principle applies worldwide -- the French just have particularly tax-efficient wrappers to do it in.
• Diversify across wrappers: Do not put everything in one product. Combine PER + life insurance + PEA to optimise for tax relief, liquidity, and flexibility. This is the French equivalent of the US advice to use 401(k) + Roth IRA + taxable brokerage.
• Match risk to horizon: The further you are from retirement, the more equity exposure you can tolerate. Start reducing risk from age 50-55. This universal principle is especially relevant in France, where the euro fund option makes de-risking straightforward.
• Use your PER allowances: Check your tax notice for available deduction ceilings (line 6NS). The past 3 years' unused allowances are cumulative -- a feature many French taxpayers overlook.
• Think about estate planning: Life insurance offers a highly favourable succession framework. Name your beneficiaries explicitly. For expats, this can be especially valuable for cross-border estate planning.
• Watch the fees: Compare entry fees, management fees, and switching fees. Online contracts typically charge 0% entry fees and offer low-cost ETFs (~0.3% management fees). French insurance contracts historically carried high fees, but competition has driven costs down significantly.